Legislative Assembly for the ACT: 1998 Week 2 Hansard (21 May) . . Page.. 511 ..
MR CORBELL (continuing):
It is important that in this debate we focus on a range of issues in relation to ACTEW. One which I am deeply concerned about, and which my colleagues are also deeply concerned about, is the issue of social responsibility. Governments have many responsibilities. Obviously, they have responsibilities for good financial management. They have responsibilities for ensuring that an asset is protected and enhanced. They have a range of responsibilities. But one of them about which we on this side of house feel very strongly is the issue of social responsibility. Indeed, the Fay Richwhite report highlights the notion of social responsibility when it refers to the Territory Owned Corporations Act, which is the piece of legislation that establishes ACTEW as a Territory-owned corporation. The report quotes the Territory Owned Corporations Act where it says that ACTEW shall "exhibit a sense of social responsibility by having regard to the interests of the community in which it operates". Mr Deputy Speaker, this is a very important tenet which ACTEW must operate under in regard to the Territory Owned Corporations Act. I would argue that it is also an important tenet on which the Government must operate when it is assessing the future ownership prospects and the future operation prospects of such a valuable asset as ACTEW.
Mr Deputy Speaker, central to the Fay Richwhite report's outline of issues to be addressed is the issue of risk and ACTEW's capability to manage risk. The concern I have with this report is in a comment made on page 6 of the report, where it says:
Given the difficulty of Governments in funding equity injections into their businesses, a high level of debt in ACTEW's capital structure will reduce its capacity to pursue growth options and thereby potentially reduce the long term value of the firm.
Mr Deputy Speaker, I am concerned about this assumption that governments are unable effectively to fund Territory-owned corporations. ACTEW has a very low level of debt in comparison with many other electricity providers and many other government-owned businesses around Australia. It also has a quite high level of cash reserves. So, Mr Deputy Speaker, I wonder why the assumption was made that governments face greater risk in injecting capital. Indeed, looking through the report, I do not really see anything in it which explains why a government faces greater difficulty in injecting capital than does the private sector. The only thing that comes up in the report, from my reading of it, is that governments face an additional risk which the private sector does not face, which is a political risk. Mr Deputy Speaker, to my way of thinking, that comes down to an issue of leadership, an issue of good management and an issue of how governments believe government business enterprises should operate and should be managed and what leadership role a government plays in setting that direction. So, Mr Deputy Speaker, that is one concern that we have in the Fay Richwhite report.
It is important that I emphasise that point, because there should be the capacity for a government to make a long-term investment which ensures that there will be a return to the Territory. You have to make sure that there is a real return to the Territory. Mr Deputy Speaker, the report highlights that there are clear, new opportunities that exist for ACTEW in the market that it competes in and that ACTEW, and thus the Government, must be better at pursuing these growth opportunities in a responsible manner.